Dangote Industries Limited’s ratings have been impacted by the devaluation of the naira, according to reports from Fitch and GCR.
Fitch Ratings downgraded DIL’s national rating to ‘B+(nga) from ‘AA(nga)’ and placed its ratings on Rating Watch Negative. Additionally, Dangote Industries Funding Plc’s senior unsecured debt rating was revised downward to ‘B+(nga)’ from ‘AA(nga) by Fitch.
Meanwhile, GCR Ratings reaffirmed DIL’s national scale long-term and short-term issuer ratings at AA+(NG) and A1+(NG) respectively.
Both agencies highlighted the impact of the naira devaluation on the group’s liquidity rating. Fitch emphasized a significant deterioration in the group’s liquidity position due to various factors.
GCR expressed concerns about the currency devaluation’s adverse effects on profitability and financial position, given the group’s substantial foreign debt exposure.
The devaluation of the naira in June 2023 by the Central Bank of Nigeria led to ongoing currency market volatility despite efforts to stabilize the foreign exchange rate.
Fitch highlighted immediate debt servicing requirements related to a syndicated loan for the construction of Dangote Oil Refining Company, emphasizing the need for timely funding to avoid financial restructuring or default.
The group’s debt structure includes senior secured and unsecured debts, with implications for its financial outlook and ability to repay maturing loans.
GCR noted the impact of the Nigerian National Petroleum Corporation Limited’s stake in the Dangote refinery on the group’s debt repayment capacity, especially considering recent decisions and divestment plans.
Despite challenges, both Fitch and GCR acknowledged the potential and strategic positioning of the Dangote Group, particularly with the successful commencement of refinery operations in 2024.